On January 29, the US Federal Reserve System (FRS) left the key rate in the range of 4.25-4.5% per annum, continuing the pause in the cycle of monetary policy easing, which began at the three previous meetings. The decision was in line with analysts' expectations and market forecasts.
After the Fed's rate announcement, the Bitcoin price tested the $104,000 level, and on the morning of January 30, it exceeded $105,000, reaching $105,450 at the time of publication. The reason for the growth was the comment by Fed Chairman Jerome Powell about the possibility of American banks working with cryptocurrencies while observing risk management principles.
In the published statement, the Federal Reserve did not mention the approaching inflation to the target of 2%, calling it 'somewhat elevated'. It was also noted that the labor market remains stable, and the unemployment rate remains low.
The tone of the statement was moderately 'hawkish', but Powell softened it during the press conference. He emphasized that the Federal Reserve does not intend to wait for inflation to decrease to 2% before changing policy, but is ready to act cautiously while awaiting new macroeconomic data.
Powell also noted the need to consider President Donald Trump's trade policy course. He did not discuss the impact of tariffs on consumers but pointed to a decrease in the effect of Chinese imports on the overall price level.
Additionally, the head of the Federal Reserve confirmed the continuation of the QT (quantitative tightening) program, which involves selling government and mortgage bonds from the regulator's balance sheet and reducing liquidity in the system. He also stated that current asset valuations appear inflated, and the decline in the AI sector indicates a tightening of financial conditions.
The next FOMC meeting is scheduled for March 18-19, 2025. According to the CME FedWatch Tool, the probability of a rate cut in March fell from 31.5% to 17%, with major expectations shifted from May to June.
The stock market reacted with a decline: the S&P 500 index fell by 0.47%. However, in pre-market trading on Thursday, the futures on the index gained 0.36% thanks to reports from Meta and IBM, which offset the weak results from Tesla and Microsoft.
Previously, CoinDesk reported an increase in the M2 money supply in the US in December 2024 to $21.5 trillion, which could be a positive signal for risk assets. Meanwhile, Bitcoin futures entered bearish territory for the first time since August 2023 amid uncertainty surrounding the FOMC meeting and news about DeepSeek.
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